In the early 1950s, monster movies were surging in popularity. The Beast from 20,000 Fathoms grossed $5 million on a $210,000 budget (and that's in 1950s dollars, so dang). King Kong was rereleased in 1952. And let's not forget Them!, It Came from Outer Space and 20,000 Leagues Under the Sea. Recognizing a trend when he saw one, Tomoyuki Tanaka, a producer at Toho Studios, said, "Hey, we should make a monster movie."
And what a monster movie he made.
In early 1954, he began the project under the working title The Big Monster from 20,000 Miles Beneath the Sea (Source). Care to take a guess where he drew his inspiration?
Tanaka then assembled a crack production team, including special effects director Eiji Tsuburaya and director Ishirō Honda, and got to work. As a producer, Tanaka had two major influences on Godzilla, and these can basically be boiled down to time and money.
All About the BenjaYens
On the money side, Tanaka and Toho sank 62,893,455 Yen (or roughly $900,000) into the project. When you add in advertising and printing costs, Godzilla cost 30 times as much as the average Japanese movie, making it the most expensive Japanese film at that time. About a third of the production cost went into special effects alone, providing the special-effects team the resources they needed for those awesome miniatures.
For reference, the most expensive movie before Godzilla was Toho's Seven Samurai (about $500,000). That movie also came out in 1954, so it was a pretty big gamble on Toho's part to bankroll two such spendy films in one year. Obviously, the gamble paid off; both movies were wildly popular and are considered classics of Japanese cinema (Source).
Hey, sometimes you just got to roll them bones, right?
Time Keeps on Slippin', Slippin', Slippin'
On the time side, Tanaka and Toho were a little less generous. The film was greenlit in April of 1954 and released on November 3 of that same year, meaning the filmmakers basically had six months to complete the project. That is insane.
Definitely the most important result of the time crunch was Godzilla itself. The film's inspirations rendered their monsters through a process called stop-motion animation. King Kong and The Beast from 20,000 Fathoms both used this technique, courtesy of the special effects pioneers Willis O'Brien and Ray Harryhausen respectively. But Tsuburaya knew this technique would be way too time consuming for their projected deadline. So, he used a man in a rubber suit stomping around on miniatures.
This may sound like a concession on Tsuburaya's part, but the results speak for themselves. To this day, Godzilla purists feel that the only legitimate way to represent the King of the Monsters is with a guy in a rubber suit—so much so, that only one Japanese Godzilla movie has ever abandoned the technique: 2016's Shin Godzilla. Even then, effects supervisor Atsuki Sato felt the need to motion capture with a live performance and to make the skin look rubbery rather than organic (Source).
The House Godzilla Built
Godzilla was so successful that it has been a cornerstone franchise for Toho ever since. Between 1954 and 2016, the studio made 29 Godzilla films and creature numerous other kaiju (literally "strange beast") films too. Some of these other monsters would join the Godzilla film series, making it one of the first cinematic universes, beating Marvel to the punch by a good five decades. In fact, Tanaka would ultimately produce more science fiction and fantasy films than any other producer in movie history (Source)
Toho has since made the King of the Monsters a worldwide phenomenon. They've released all of their films to overseas markets; let Hollywood studios have a go at making Godzilla films; and licensed the big G's image for books, comics, video games, and every bit of merch that's ever merchandized.
In short, Tanaka and Toho released a commercial monster upon the world, and they show no signs of reining it in any time soon.